Core Portfolios FAQs

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What is Core Portfolios?

Core Portfolios is a professionally managed advisory program from E*TRADE Capital Management. It helps keep investors on track with their financial goals and is part of E*TRADE Personalized Investments. Core Portfolios assesses investment objectives, risk tolerance, time horizon, and other considerations to identify an appropriate asset allocation for each investor. It enables clients to invest in a portfolio of exchange-traded funds (ETFs) with a $5,000 minimum account balance to enroll. The portfolio is rebalanced2 semiannually, and when material deposits or withdrawals are made. Investors have access to a dedicated team of specialists that they can speak with whenever they have a question.

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How does it work?

When we designed Core Portfolios, we started with the premise that we don't start until we get to know you. In three easy steps, get an efficient digital portfolio that is guided by you.

1. Tell us about yourself
Just complete a short online questionnaire. Based on your investment objective, timeline, and risk tolerance, we'll recommend a diversified portfolio for you.

2. Review your recommendation
Next, review your portfolio recommended based on your answers. Then, you can further personalize your investment approach with taxable and tax-sensitive portfolios, as well as socially responsible and smart beta investment strategies.

3. Get started (or implement your plan)
With just a few clicks, put your plan into action with Core Portfolios. Our technology will then monitor and rebalance your portfolio as needed to help manage your risk and keep you on track.

Plus, you'll be able to stay in control of your investing strategy and track your performance 24/7 through our digital dashboard. If your financial circumstances change, you can update your investor profile at any time, to keep you on track to meet your goals.

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How much does Core Portfolios cost?

There is an annual flat fee of 0.30%.

Each quarter, we calculate the fee6 based on the average daily market value of the account. For example, an account with an average daily balance of $50K for the quarter will be charged $37.50 for that quarter. This direct fee is charged at the beginning of each new quarter for services provided the previous quarter. It is automatically deducted from the cash position in the account.

Account Market Value7

Annual Flat Fee

$5,000 and over

0.30%

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How do you rebalance an account?

E*TRADE Capital Management uses technology to rebalance an account semiannually in order to align it with the target asset allocation. It will also review the account for material deposits and withdrawals, and rebalance if it shifts too far from its target asset allocation. Although we monitor the account daily, it does not mean we will trade in the account daily. There could be some periods of time where the allocation does not shift, and no trades are required.

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PLEASE READ THE IMPORTANT DISCLOSURES BELOW.

For more detailed discussion about the risks of investing in a mutual fund or ETF, as well as the fund's investment objectives, policies, charges, and expenses, please read the fund's prospectus. To obtain the most recent prospectus, please visit www.etrade.com/mutualfunds or visit the Exchange-Traded Funds Center at www.etrade.com/etf.

E*TRADE Financial Corporation and its affiliates do not provide tax advice, and you always should consult your own tax advisor regarding your personal circumstances before taking any action that may have tax consequences.

Diversification and asset allocation strategies do not ensure profit or protect against loss. Investments in securities and other instruments involve risk and will not always be profitable.

Prior to investing in a managed portfolio, E*TRADE Capital Management will obtain important information about your financial situation and risk tolerances and provide you with a detailed investment proposal, investment advisory agreement, and wrap fee programs brochure. These documents contain important information that should be read carefully before enrolling in a managed account program. Please read the E*TRADE Wrap Fee Programs Brochure for more information on the advisory fee, rebalancing methodologies, portfolio management, affiliations, and services offered.

Core Portfolios utilizes a semiannual rebalancing methodology. Also, portfolios will be rebalanced when material deposits or withdrawals are made. A rebalancing strategy seeks to minimize relative risk by aligning the portfolio to a target asset allocation as the portfolio’s asset allocation changes. Rebalancing a portfolio may limit the upside growth potential of the portfolio and these types of strategies might rebalance the client accounts without regard to market conditions. Furthermore, rebalancing strategies may not address prolonged changes in market conditions. Out of tolerance parameters and/or rebalancing methodologies are subject to change.

The Core Portfolios advisory program recommends portfolios based on answers to your Investor Profile Questionnaire. E*TRADE Capital Management utilizes an algorithm to determine your recommended portfolio. Not all answers are weighted equally and answers related to time horizon and risk are weighted the most when scoring the Investor Profile Questionnaire. The recommendation is not a complete financial plan and the algorithm does not consider outside assets, concentration of holdings in other accounts, and multiple investment goals. You may further personalize your portfolio by selecting a tax-sensitive ETF portfolio. Additionally, clients may include either a socially responsible investment or an investment that uses a smart beta strategy. Core Portfolios may not be suitable for all investors. When your goals or financial situation change, you can visit etrade.com at any time to update your Investor Profile, this may result in a new portfolio recommendation.

For Core Portfolios clients, interaction with E*TRADE Capital Management will generally be limited to the web-based interface. A Core Portfolios client does not have an individual Financial Consultant or portfolio manager assigned to the account. E*TRADE Capital Management, through its Investment Policy Committee and with support of Investment Strategists, selects, removes, and adds portfolio holdings and determines the program's rebalancing methodology. Clients will be able to consult with a team of specialists by calling 866-484-3658.

Time-tested investment principles refers to a disciplined investment strategy based on Modern Portfolio Theory (MPT), which is a widely utilized framework for building diversified investment portfolios. Many of the assumptions made in MPT rely on historical data, which may not be representative of the future, potentially leading to unexpected outcomes. For more information about MPT, read the Core Portfolios FAQ
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The Annual Advisory Fee is the direct fee charged to any client in the Core Portfolios program. The dollar amount represented above is the advisory fee based on the $5,000 account minimum. The advisory fee does not cover underlying management fees and expenses of any mutual fund or ETF investment held in the portfolio.

Account Market Value is the daily weighted average market value of assets held in the Advisory Account during the quarter after the close of business on the last trading day of the quarter. The quarters end on the last day of March, June, September, and December.